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    Red face Can a H1 Visa Holder Claim Business Losses on His Taxes

    I am on H1B visa and my wife is on H4 visa in the US. We want to start a LLC with the two of us as member. I understand that we can open/start an LLC on our visa status. We should not be working / drawing salary from this business. We are planning to appoint the CEO of this company who will manage the day to day operations of the company from India. The person will be based in India and will be working for this company from there. Since the main operations of the company would be ecommerce and web / internet website this can be possible.

    I understand that me and my wife will be passive investors in this llc and will not work/gain anything from it.

    My question to you is that as business owners are we allowed to claim business losses / profits on 1040 Schedule C on our IRS tax returns for setting up and running the LLC?

    Is Schedule C 1040 considered as self employment and not investing into a business? If Yes, then according to the H1 and H4 visa rules we can not be work for any other business other than who has sponsored us on the H1 visa.

    Is it beneficial to start a S Corp rather than a LLC because the S Corp will be taxed as a corporation and we can make the case that this is an investment rather than a self employment?

    Thanks for your help!!! Your help will be very much appriciated..

    Thanks

    RK
    Richmond, VA

  2. #2
    Join Date
    Jul 2007
    Location
    Florida
    Posts
    2,344

    Default Re: Business Owner (LLC on H1 and H4 Visa) Allowed to Claim Loss/Profit 1040 Schedule

    A multi-member LLC cannot file its tax return on a Schedule C. It can only file on a 1065 partnership return or a corporate return. S corp status is not available to foreign nationals.

    I'm not an expert on immigration or visa status, but I believe an H1B visa holder can only work for the sponsoring organization, not anywhere they like. So anything that smacks of self-employment might cause visa problems. Partnership income is typically considered self-employment income. You can certainly invest. The best avenue would seem to me to be a C corporation and hiring someone else to run it.

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